Indian traders have started loading 40,000 tonnes of rice for rapid shipment to Sri Lanka in the first major food aid since Colombo secured a line of credit from New Delhi, two officials told Reuters on Saturday.
The Indian Ocean island nation of 22 million people is struggling to pay for essential imports after a 70% drop in foreign exchange reserves in two years led to a currency devaluation and efforts to seek help from global lenders.
The shipment of the staple comes ahead of a key festival in Sri Lanka.
Fuel is running low, food prices are skyrocketing and protests have erupted as the Sri Lankan government prepares for talks with the International Monetary Fund amid concerns over the country’s ability to repay its debt exterior.
India, the world’s largest rice exporter, agreed last month to provide the $1 billion line of credit to help ease crippling shortages of essential items including fuel, food and medicine .
Rice shipments could help Colombo lower rice prices, which have doubled in a year, adding fuel to unrest.
“The loading of rice has started in the southern ports,” said BV Krishna Rao, managing director of Pattabhi Agro Foods, which supplies rice to Sri Lanka State Trading (General) Corp under the facility agreement. Indian credit.
“We are loading containers first for fast shipments and ship loading will begin in a few days.”
Sri Lankan President Gotabaya Rajapaksa on Friday evening declared a nationwide public emergency following violent protests over the country’s worst economic crisis in decades. Read the full story
Indian rice will be available before demand jumps for the mid-April New Year festival in Sri Lanka, a Mumbai-based dealer with a global trading company has said.
“At the moment only India can ship rice quickly. Other countries need weeks, India can deliver within days,” the dealer said.
India’s backing comes after previous administrations led by the Rajapaksa family pushed Sri Lanka closer to China over the past decade, causing unease in New Delhi.
The 40,000 tonne shipment is part of the 300,000 tonnes India will supply to Sri Lanka over the next few months, Rao said.
Sri Lanka became a net importer of rice as its production plummeted after Colombo banned all chemical fertilizers in 2021, a decision that was later reversed.
Indian traders are expected to start shipping other essentials like sugar and wheat in the coming weeks, the trader said.
Also read: Sri Lanka declares emergency as economic crisis triggers unrest